It’s happened time and time again. You’ve lost a good employee because someone else is willing to pay them more than you are. It’s not the employee’s fault.
They have a family to think of and mouths to feed. They have to go where the money is. This has you asking though, “how much should I pay my employees to keep them around”?
There are simple ways to calculate how much your workers are worth. It starts by breaking down the duties you need them to perform. Keep reading for a detailed guide on how to pay your employees what they deserve.
Table of Contents
Create a Job Description
Before you can determine employee salaries, you need to know what you’re paying them for. Create a job description that highlights your worker’s duties.
You should also include the amount of experience and education you expect workers to have before you’ll be willing to give them an interview. Of course, writing all this down won’t tell you how much you should pay them but it will give you a good starting point for your research.
Check Pay Rates
Take all the big keywords from your job description and plug them into pay calculator sites. It will give you a list of both the high and low pay rates for the industry your business falls under.
Looking at it, you can see how much you can get away with paying entry employees. You can also see how much to pay workers that have a little bit more experience than the average joe.
Keep Your Budget in Mind
Now that you know what your workers are worth, it’s time to figure out how to make it work with your budget. We’ll tell you that most businesses spend around 60 to 70% of all their gross avenue on paying employees.
This doesn’t mean that you have to stay in this number range when you create check stubs. You should compare that percentage to how much money you perceive an employee making you. What’s the return investment?
Pay your employees what you will but it has to stay within wage laws. First off, you have to give at least the minimum wage. Some states have their own minimum wage that they put in place.
If it’s higher than the regular 7.25 rate, you have to pay them the higher wage. It’s also important to note that if you want to attract quality employees, you might want to offer a bit over the minimum amount. Especially if there’s a lot that goes into the job.
There are also laws put in place concerning overtime. Both full-time and part-time employees have their own separate set of laws. There’s a lot of research you have to do.
How Much Should I Pay My Employees to Keep Them Around
How much should I pay my employees? That all depends on your budget and of course, wage laws. You’ve got to be able to pay at least minimum wage.
What you pay also has to match up to the number of duties you’re asking your employees to perform. Give your employees what they’re worth and keep them around.
Paying your employees is only one part of owning a business. Check out our blog daily for more tips on how to keep your company going.